What Has Gone So Awry at Zipcar – Is the UK Car-Sharing Market Finished?
A volunteer food project in Rotherhithe has been delivering a large number of cooked meals weekly for the past two years to pensioners and needy locals in southeast London. However, their operations have been thrown into disarray by the announcement that they will lose access to New Year’s Day.
This organization had relied on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. It caused shock across London when it said it would cease its UK operations from 1 January.
It will mean many helpers will be unable to collect food from the Felix Project, which gathers excess produce from grocery stores, cafes and restaurants. Other options are less convenient, more expensive, or lack the same flexible hours.
“The impact will be massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are worried about the operational hurdle we will face. Many groups like ours are going to struggle.”
“Faced with this reality, everyone is concerned and thinking: ‘How are we going to carry on?”
A Significant Setback for Urban Car-Sharing
The community kitchen’s drivers are part of more than half a million people in London who were car club members, now potentially left without easy use to vehicles, avoiding the burden and cost of ownership. Most of those members were likely with Zipcar, which held a dominant position in the city.
The planned closure, subject to consultation with staff, is a serious setback to the vision that car sharing in urban areas could cut the need for private vehicle ownership. However, some analysts also suggested that Zipcar’s departure need not mean the demise for the concept in Britain.
The Promise of Car Sharing
Shared vehicle use is prized by city planners and green advocates as a way of reducing the problems linked to vehicle ownership. Typically, vehicles sit idle on the side of the road for the vast majority of the time, using up space. They also require large carbon emissions to produce, and people who do not own cars tend to use active travel and take transit more. That helps urban areas – reducing congestion and pollution – and improves people’s health through increased activity.
Understanding the Decline
Zipcar was founded in 2000 before being bought by the US car rental group Avis Budget in 2013. Zipcar’s UK revenues were minimal compared with its owner's overall annual revenue, and a loss that reached £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “broader transformation across our international business, where we are taking targeted actions to streamline operations, enhance profitability”.
Its latest financial reports said revenues had declined as drivers took less frequent, shorter trips. “This trend reflect the ongoing impact of the cost-of-living crisis, which continues to suppress demand for discretionary spending,” it said.
London's Unique Hurdles
Yet, several experts noted that London has specific problems that made it much harder for the sector to succeed.
- Patchwork Policies: With numerous local councils, car-club operators face a patchwork of varying processes and prices that made it harder.
- Congestion Charge: The closure coincides with electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Unequal Parking Fees: Locals in some boroughs pay as little as £63 for a annual electric car parking permit. A similar shared vehicle would pay over £1,100 per year, creating a major disincentive.
“Our fees should be one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
A European Example
Nations in Europe offer examples for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system for parking, support and exemptions. Now, the country has 5.4 shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK trails at 0.7.
“What we see is that car sharing around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.
Devanathan said authorities should start to view vehicle clubs as a form of mass transit, and integrate it with train and bus stations. He added that one unnamed client was looking at entering the London market: “There will be fill this gap.”
What Comes Next?
Other players can roughly be divided into two models:
- Fleet Operators: Which maintain their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: Which allow users to rent out their own vehicles via an app – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
Turo, a US-headquartered peer-to-peer platform, is already weighing up the UK gap. Rory Brimmer, its UK managing director, said there was a “significant chance” to win more users. “There is a void that is going to need to be filled, because London still needs to move,” Brimmer said.
However, it could take some time for other players to build momentum. For now, more people may feel forced to buy cars, and many across London will be left without access.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a way. The delivery problem caused by Zipcar’s exit highlights the broader impact of its departure on community groups and the future of car-sharing in the UK.
